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Thursday, 7 January 2016

In 2015, it is estimated that Canada’s health expenditures will reach $219.1 billion, or an equivalent of $6,105 per Canadian. This amount would represent 10.9% of the country’s gross domestic product (GDP).

About 71% of the total health expenditure this year is estimated to come from public-sector funding, 66% of which will be provincial and territorial government spending. Another 5% will come from other parts of the public sector, such as the federal government, municipal governments, and social security funds.

The remaining 29% of health spending for the year will comprise of private funding, made up of out-of-pocket spending (14%), private health insurance (12%), and other sources (3%).

Health spending in Canada, compared to other countries

According to the 2013 data on spending, Canada was in the top quarter of the Organisation for Economic Co-operation and Development (OECD) countries when it came to health expenditures. Only the United States ($9,086USD), Germany ($4,920USD), and Denmark ($4,847USD) spent more than Canada ($4,569USD) per person on health in 2013.

France ($4,361USD), Australia ($4,115USD), Japan ($3,713USD), Finland ($3,645USD), and the United Kingdom ($3,364USD) completed the list of the top 9 spenders out of the 29 countries in the OECD that have comparable accounting systems. The OECD average spending per person was $3,566USD.

What Canada spends its health dollars on

Three main categories, hospitals, drugs, and physicians, make up over 60% of health expenditures in Canada. In 2015, it is forecasted that hospitals will account for 29.5% of spending, drugs will reach 15.7%, and physician services will be at 15.5%. A growth of 0.9%, 0.7%, and 2.2%, respectively, is estimated for 2015 health expenditures in the three categories from the previous year of data.

The remaining 40% of health spending goes towards purchasing other health care goods and services, administering public and private insurance plans and public-sector health programs, and funding research. Long-term care institutions will make up about 10.7% of this spending, with another 10% going to allied health professionals in the dental, vision, and other fields.

Hospitals and physicians are services covered under the Canada Health Act and are therefore financed mainly through the public sector. Drugs and other health professionals and services are primarily financed from sources in the private sector.

Health spending in Canada’s provinces and territories

Canada’s territories have the highest health expenditures per capita, in large part due to the vast geographical area that needs to be covered and low population, compared with the rest of the country. In 2015, the Yukon Territory is projected to spend $10,949 per person in health expenditures. The Northwest Territories will spend $13,880 per person. Nunavut is projected to spend the most per capita in the country at $14,059.

The provinces spend less per capita. The amounts range from the lowest, $5,665 spent in Quebec, to the highest, $7,036 spent per person in Newfoundland and Labrador. A full breakdown of health expenditures for all provinces and territories can be seen in the table below.

Province/territory

Amount spent per capita (projected for 2015)

% of budget for provincial/territorial government health spending (projected for 2014)

% of per capita growth/decline

British Columbia

$5,875

43%

+1.2%

Alberta

$6,966

42%

+0.1%

Saskatchewan

$6,686

38%

+1.2%

Manitoba

$6,927

46%

+2.1%

Ontario

$5,920

41%

-0.1%

Quebec

$5,665

30%

+0.5%

Newfoundland and Labrador

$7,036

40%

+3.7%

New Brunswick

$6,310

40%

+1.7%

Nova Scotia

$6,560

46%

+2.2%

Prince Edward Island

$6,352

37%

=0.0%

Yukon Territory

$10,949

18%

+8.8%

Northwest Territories

$13,880

21%

+8.5%

Nunavut

$14,059

29%

-0.8%

Canadian average

$6,105

38%

+0.6%

Health spending by population group

The spending varies among population groups, particularly when it comes to age range. The last available data for provincial/territorial spending based on age groups is from 2013.

Age group

Average estimated amount spent per person

infants (less than 1 year old)

$10,897

youths (1 year old to 14 years old)

$1,408

adolescents/adults (15 years old to 64 years old)

$2,637

seniors (65+ years old)

$11,598

While seniors make up around 15% of the Canadian population, provinces and territories spend more than 45% of all public-sector health care funding on them. Costs increase as the population ages. By breaking down senior age groups into 5 year increments, a steady rise occurs.

Age group

Average estimated amount spent per person

65 - 69 years of age

$6,298

70 - 74 years of age

$8,384

75 - 79 years of age

$11,557

80+ years of age

$20,917

Factors that influence health spending

A number of factors influence the cost of health care, including inflation, population growth, the aging of the population, and other residual factors such as health sector inflation, the efficiency of the health care system, and changes in the technology available and the use of services.

Health care costs have risen by approximately 14.5% over the past 15 years, 6.6% of which is estimated to be attributed to general inflation. Demographic cost drivers (population growth and aging) have only contributed to a combined estimate of 2% growth over the last decade, although these factors vary greatly by province or territory.

Since 2013, the last year that health spending data by age and sex is available, it is forecasted that health expenditures have risen by 3.1% in 2014 and another 1.5% in 2015.